US Treasuries fell on Wednesday, weighed down by a global slide in government bond markets that pushed yields to 2015 peaks and large bond sales by Apple Inc and Royal Dutch Shell. Longer-maturity Treasuries declined the most, with the yield on the 30-year bond going above 3 percent for the first time since December 5. Yields on the 10-year Treasury hit their highest level since March 6.
Price drops in European and other global debt markets have lifted government interest rates, in part because rebounding oil prices have eased fears about deflation. Germany's 10-year government bond yield hit a 2015 high just under 0.6 percent after striking a record low of 0.05 percent last month. Many other European government bond yields also hit highs for the year.
Treasuries were also under pressure from big sales of bonds by Apple Inc and oil major Royal Dutch Shell. Apple announced an $8 billion, seven-part deal to help fund dividends and share buybacks. The company's 30-year security was offered at a yield 140 to 145 basis points over a Treasury long bond. Shell offered a $10 billion deal in what is its first appearance in the debt capital markets since 2013.
Treasuries losses were curbed by short-of-forecast reports on US private sector payrolls and worker productivity that might discourage the Federal Reserve from hiking interest rates at its next policy-setting meeting in June. Private payrolls increased 169,000 last month, the ADP National Employment Report showed. That was the fewest since January 2014 and short of expectations for a rise of 200,000.
The Labour Department said separately that nonfarm productivity fell in the first quarter as harsh winter weather hurt output, pushing labour-related production costs to rise at the quickest pace in a year. "The weaker data today did not give the market much of a pop," said Kim Rupert, managing director at Action Economics in San Francisco. "The ADP number was quite disappointing, and the productivity number wasn't great either. Treasuries just can't get a foothold." The 10-year note was last off 19/32 to yield 2.2449 percent after peaking at 2.258 percent. The 30-year bond was last down 1-20/32 in price and yielding 2.9838 percent, down from a session high of 3.009 percent.